There is a better way to invest, Nickolas Skaltsis told Andolina. For years, Skaltsis said, he had turned around distressed real-estate properties for healthy profit -- a high-yielding investment method that his existing investors swore by when contacted by Andolina.

Andolina was in.

The former Westford resident, who served as a New Hampshire state representative for Dover at the time, wrote Skaltsis a $20,000 check.

The problem was, according to the N.H. Attorney General's Office and the N.H. Bureau of Securities Regulation, Skaltsis wasn't using the money to flip properties at all. Instead, Skaltsis, a former Dover School Board chairman, allegedly swindled 13 investors, including Andolina and Tewksbury School District Superintendent John O'Connor, out of hundreds of thousands of dollars in a Ponzi scheme to spend it on his debt payments and shopping.

"I made a mistake," O'Connor said in a phone interview Tuesday about his decision to invest with Skaltsis.

"People fell prey to him because everybody knows him," Andolina said of Skaltsis. "(Swindlers) try to get friendly with you. They make you feel like you are a friend and can trust them."

The N.H.

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Attorney General's Office arrested Skaltsis on Thursday and charged him with 19 felony counts of theft for operating a fraudulent investment scheme. Skaltsis solicited investments from various individuals in the area, promising the return with up to 14 percent interest, while spending the funds for personal purposes and failing to repay his investors, according to the Attorney General's Office.

The investors identified in the 19 charges lost a total of $287,000. the Attorney General's Office said in its press release.

In the meantime, the N.H. Bureau of Security Regulations, which also investigated the case, alleged that Skaltsis has issued at least 21 unsecured promissory notes to raise $327,500 from the 13 investors since February 2011, of which $304,000 remains owed in addition to the promised interest.

Skaltsis is also accused of raising an additional $32,500 from investors during 2010. Skaltsis falsely promised the investors that he would use these funds to buy, rehabilitate and sell distressed properties in Strafford County in New Hampshire while, in reality, he used the money to pay old debts, mixing the funds with a private account and cashing them for personal purposes -- wrongdoing that fits the definition of a so-called Ponzi scheme -- according to the Bureau of Securities Regulation.

Andolina, who worked as an IT operations manager at Raytheon Missile Systems between 1988 and 1998, said the investors only realized something had gone wrong when Skaltsis failed to pay back their money. Left high and dry, they would repeatedly urge Skaltsis to pay up to no avail.

O'Connor, who served as Dover School District's superintendent between 2004 and 2010 before taking his current position in Tewksbury, lives in Dover. O'Connor said he met Skaltsis in 1998 when Skaltsis began serving on the School Board. O'Connor said Tuesday that he made a bad investment choice but declined to further comment, saying it's something he did in his private life and had nothing to do with his District job.

Skaltsis, who last served on the School Board in 2004, once owned many buildings in downtown Dover and was involved in various community affairs.

"This guy was born and raised in Dover and was one of the pillars of the community," Andolina said.

After two weeks of trying to get his money back from Skaltsis last August, Andolina reported the problem to the Dover Police Department, prompting investigations by police, the AG's office and the Bureau of Securities Regulation. Andolina, who was the first victim to alert police, said about 10 investors showed up for the first meeting with other alleged victims that he set up at the local library.

"They were afraid, perhaps embarrassed" to seek charges against Skaltsis, Andolina said. Andolina then sent out a public alert to the City Council and the Dover Chamber of Commerce, warning the residents that a Ponzi scheme may be in operation in the Dover area and that some local investors had recently lost money.

That "set a fire under Nick," Andolina said.

All the assets that belong to Skaltsis and the businesses associated with him, Liberty Realty Trust and Phoenix Asset Group, are now frozen per order that the Bureau of Securities Regulation obtained from Strafford County Superior Court Justice Brian Tucker. The Bureau is seeking restitution to investors from Skaltsis and the aforementioned businesses.

Skaltsis was arraigned in the Rochester Circuit Court in Rochester, N.H., on Thursday. The court allowed him to remain at New Hampshire State Hospital, a state-run mental-health facility in Concord, on personal recognizance bail that will be immediately converted to $300,000 cash bail upon his discharge from the hospital. Skaltsis has been hospitalized there since an October suicide attempt, according to Foster's Daily Democrat.

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